Bauernfreund reduces gearing on £1.2bn AVI Global trust

13% gearing

Joe Bauernfreund, manager of the £1.2bn AVI Global trust, has been reducing the gearing on the portfolio since the end of 2021 and “slowly but surely” eliminated the entirety of the gearing and moved to a small cash position.

He said this move was due to a combination of the shifting monetary policy and evaluation concerns.  According to Morningstar, the trust has had a three-year high of 13% gearing and is able to go as high as 20%. With gearing at zero, the trust now also has 12.8% in cash.  "In general, I do not like the idea of trying to time markets and trying to have major cash positions at various points in time," the manager said. "But I do, at the margin, like to adjust the gearing at points in time where it feels right to have a bit of capital available to us in our in our back pockets." He sa...